6 Reasons We're Bullish On Canada

Joe Weisenthal

Feb. 24, 2009, 2:50 PM

There's no corner of the globe that looks safe from the falling debris these days. Europe looks like it's cracking apart, not just its economy but its society. China is a giant powder keg. Russia is a basket case. Japan's been a zombie for more than 20 years. The UK? Ha.

Maybe the answer is right under our nose, or right above our border, in Canada. The more we think about it, the more we like Canada's prospects for the long-term. Here's what we're thinking.

Natural resources. Canada has 'em in spades. Frequently abundant natural resources goes alongside dictatorship and political backwardness. Not so in Canada. We're sure Canadian democracy has its quirks, but by and large, things seem to be fairly smooth. Anyway, when global demand picks up again, its natural resources will be in high demand. And if things get really bad, and global trade breaks down it can take care of itself without being too much of a beggar.

Financial solvency. Canada didn't make the mistake of subsidizing homeowners, and it didn't have the same kind of bubble as ours. As such its banks are healthier, and what problems they do have are more likely to be fixable since they're not hung up on old ideas, like preserving an arbitrarily-defined "Canadian Dream."

They can afford their socialism. Ok, so we're not crazy about their European-style socialism, but unlike Europe they can probably afford it over the long term. Canada doesn't have gigantic ghettos of disaffected, unemployed North African or Muslim youth that haven't been integrated into its core culture. The tax base is braod, and the taxed-class isn't likely to get resentful over feeling as though its subsidizing a particular group.

Healthcare. This goes along with the above point, but specifically they seem to be addressing their problems, whereas in the US we're moving more in the other direction. Even though there are problems with their system, it's not particularly high cost (in part because their government is a drug-buying monopsony).

Global warming. Canada's cold weather sucks, but if you believe Al Gore, it should get nicer. And we could imagine the bread basket of the United States moving northward to Central Canada, making the country even more rich in terms of resources.

Geopolitics. Canada isn't likely to be high on any terrorist's target list.

This is not to say they don't have problems. Their biggest trading partner is the US and that's not particularly good, though the US isn't going to evaporate anytime soon.

So what do you think. Last time we posted about Canada several people argued that things aren't any good there, but we're looking long term.